Getting a mortgage with a default

A default will last 6 years on your credit file from the date of registration^[1]A collection agency may add another default to your credit file if they buy your debt. This happens when the collection agency takes over the debt, resulting in two defaults on your report.

The collection agency will re-register the first default as “satisfied” and then register a new default as “debt assigned”. This tells anyone checking your report what has happened.

The expiration date remains the same. It stays on your report for 6 years from the first entry, and then both entries should be deleted.

If a default has been registered correctly this will remain on your credit file for 6 years. This is even if you have paid it off in full. However, if it has been registered in error you can request its removal.

To do so you will need to contact the company that has registered the default or the credit reference agencies where it is recorded. Ensure you have evidence to hand that you can provide where required. Items such as proof of payment, bank statements, identification and proof of address.

If they agency is satisfied with this evidence, they will then remove the default from your credit file.

There is no set time that lenders require to have passed in order for you to get a mortgage. Instead, there are a number of factors they will look at to get an overall picture of your financial situation, not just your credit history.

Of course, the more time that has passed, the better it will look to lenders. However, this doesn’t mean that you can’t get a mortgage within a year of a default being registered.

Typically, the more recent a default is, let’s say within the past 2 years, the less chance of success you will have with mainstream and high street lenders. Instead, you will need to need to utilise more niche, specialist bad credit lenders who take a much broader approach to your circumstances.

If your default has been removed from your credit file after the 6-year period, your lending options will be much more open, providing your recent credit has been kept clean. This means that its likely mainstream lenders will be much more accepting, and you wont always need to rely on specialist lenders.

If you have satisfied your default, it can show lenders that you have taken control of your finances, which looks good to them and will work in your favour. Although, lenders don’t always just focus on if the default has been satisfied. They also like enough time to have passed since the default was registered, as mentioned above.